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Gala2k [10]
3 years ago
6

A stock with a current market price of $50 and a strike price of $45 has an associated put option priced at $3.50. This put has

an intrinsic value of ______ and a time value of _____.
PLEASE SHOW ALL STEPS, THANK YOU!

A.) $5; $3.50
B.) $3.50; $5
C.) $3.50; $0
D.) $0; $3.50
Business
1 answer:
Rashid [163]3 years ago
6 0

Answer:

The answer is D

Explanation:

Intrinsic value can be found by simply using the following formula

Put intrinsic value = Strike Price - Current selling price

this gives,

PIV = $45 - $50 = $-5

A put intrinsic value cannot be vegetative as it can be exercised right now at the current price. Thus it is interpreted as 0.

Time value is calculated as follows

Time Value = Option Price - Intrinsic Value

This gives   TV = $3.5 - $0 = $3.5

Hope this helps.

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Suppose a farmer in Georgia begins to grow peaches. He uses​ $1,000,000 in savings to purchase​ land, he rents equipment for ​$1
mina [271]

Answer:

-$475,000

Explanation:

Total revenue = Baskets of peaches × Price

                       = 100,000 × $3

                       = $300,000

Explicit cost:

= Rent equipment + wages

= $100,000 + $100,000

= $200,000

Implicit cost:

= Land × Interest + salesman earned

=  $1,000,000 × 0.55 + $25,000

= $575,000

Total cost = Explicit cost: + Implicit cost

                = $200,000 + $575,000

                = $775,000

Economic profit = Total revenue - Total cost

                           = $300,000 - $775,000

                           = -$475,000

8 0
3 years ago
How will an increase in the percentage of older Americans affect the healthcare field
denis-greek [22]
In Economic theory, we learn that generally, the more older people there are, there is an increase in the demand of healthcare. As a result, the increase in demand for healthcare may increase prices and cause a higher demand for doctors and nurses.
5 0
3 years ago
Tacoda Systems tracks consumers' online activity and delivers specific banners based on that activity. This tracking and ad deli
shtirl [24]

Answer:

behavioral targeting

Explanation:

It must allow us to segment our users based on variables related to their behavior such as the number of visits you have made in our online store, what products you have purchased, which controlled categories, whether you have registered as a user or not, etc.

8 0
3 years ago
Devalued currency may be a good reason for a country to:
finlep [7]
It’s D. Countertrade.
7 0
3 years ago
During the month of June, Whispering Boutique recorded cash sales of $302,810 and credit sales of $130,219, both of which includ
irina [24]

Answer and Explanation:

The Journal entry is shown below:-

1. Sales revenue Dr, $28,656      ($121,700 + $287,673) × 7%

                To Sales tax payable $28,656

(Being sales tax payable is recorded)

Here we debited the sales revenue as it decreased the revenue while we credited the sales tax payable as  it increased the liabilities so that the proper posting could be done

Working note

Credit sales = $130,219 × 100 ÷ 107

= $121,700

Cash sales = $302,810 × 100 ÷ 107

= $287,673

7 0
3 years ago
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